India’s retail inflation continued its steady rise in June on the back of buoyant oil and housing prices giving the monetary policy committee more to think about in its next meet.Consumer price inflation stood at 5 percent in June, compared with 4.87 percent in May, according to data released by the Central Statistics Office. Economists polled by Bloomberg had estimated CPI inflation at 5.29 percent.The MPC had raised benchmark interest rates for the first time in four years in its June policy citing inflationary risks, particularly from higher global oil prices.While that’s something the rate-setting panel had largely factored in, an “abrupt acceleration” in core inflation, that strips out fuel and food prices, has also added to the pressure, the minutes of the 6 June meeting showed.With most economists expecting at least one more rate hike in 2018-19, the June inflation reading will be key as the panel meets again at the end of this month.The panel expects inflation at 4.8-4.9 percent in the first half of the year and at 4.7 percent in the second half.Inching Higher“Our view is that this marks a peak,” Bloomberg Economics’ Abhishek Gupta wrote in a note prior to the release of the inflation figures. “Favourable base effects will kick in from July, pulling inflation down sharply toward the Reserve Bank of India’s 4 percent target by December.”However, the Narendra Modi administration has also increased the minimum support price for kharif crops as it delivers on a long-standing campaign promise barely a year ahead of the next general election.Economists, who had earlier warned that such a hike would add to inflation, now expect that this could trigger a policy tightening cycle.“While the statistical impact on inflation would be 90-95 basis points, realistically, it would be around 40-60 basis points assuming full pass-through on the procured crops,” Suvodeep Rakshit and Upasna Bhardwaj, economists at Kotak Economic Research, had said in a note.Inflation InternalsFood price inflation stood at 2.9 percent in June compared with 3.1 percent in May.Fuel and light inflation stood at 7.14 percent in June compared with 5.8 percent in May.Clothing and footwear inflation was at 5.67 percent in June compared with 5.47 percent in May.Housing inflation stood at 8.45 percent in June compared with 8.4 percent in May.Inflation in pan, tobacco and intoxicants stood at 8.05 percent, compared with 8 percent in May.(Published in an arrangement with BloombergQuint) We'll get through this! Meanwhile, here's all you need to know about the Coronavirus outbreak to keep yourself safe, informed, and updated. The Quint is now available on Telegram & WhatsApp too, Click here to join.